Can the Money 2.0 Startups Get Their Finances in Order?

Although I personally find the low national savings rate scary, for the myriad of next-generation personal finance sites, it’s an opportunity. Most pitch their sites as a resource for younger Americans trying to figure out where their money goes each month — and to help them keep their bank accounts out of the red. And unlike many of the web-based consumer applications out there, bringing personal finance to the web makes sense. There are also numerous revenue opportunities for them, which means some of these companies will survive.

By taking financial applications off the desktop, this next generation of services is pushing two separate innovations. It’s putting data on the Net in a way in which that information can be aggregated (think how powerful a tool like Mint’s analysis of Starbucks spending in various regions could be if a Starbucks investors could see that amount grow or decrease over time) while also allowing complete access to that data from anywhere. That’s an important benefit for those trying to stay on a budget or even for monitoring an account for fraud. As mobile browsing improves this will become even more prevalent.

Many of the sites don’t support more advanced financial transactions, such as tracking a mortgage or following investment accounts, although Geezeo and Yodlee do and several others, such as Mint, say they are adding those features in the coming months. Even more interesting are the sites such as Voyant and BoulevardR, which give users a holistic picture of their financial goals, tracking how current savings rates and spending will affect retirement or plans to buy a boat at age 50.

Into this growing hodge-podge of services (there’s a BarCamp in San Fransisco devoted solely to personal finance in March, and the inaugural Money:Tech Conference next week) comes Quicken, which launched its Quicken Online product earlier this month. So far it’s the only one I found that’s charging a subscription fee for its services ($2.99 per month), but it’s also a known brand in the space. Wesabe plans to charge subscription fees, but has yet to do so.

The subscription model is going up against what are essentially two different models built around advertising. In one, the site act as a lead generator for financial planners and products; in the other, advertisers are putting banners and other such ads directly onto the site.

While the lead generation-supported sites seem less trustworthy (is the annuity Bank A offers really the best product or did the bank just pay more than the other providers?), their creators are trying to strike a balance between getting paid and providing a useful, free service to consumers. Sites such as Mint push financial products only if they save a user money, while a site like Voyant allows a community of users to rate the benefits of a financial product being offered. Geezeo is close to this model; it offers users the opportunity to comparison shop among different financial products.

Others seem to have a murkier view of their plans for monetization. The CEO of recently funded SpendView Nikhil Roy tells me that the site will take advertising based on whether the product can help the customer save money or the planet. Others tell me they are focused on getting users rather than revenue. As the economy slows, more users may be inclined to try the sites, but if those without solid financial footing slip, it could trip up the entire sector for a long time to come.